Iowa Real Estate Practice Exam

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Study for the Iowa Real Estate Test. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

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When a broker's partnership license is suspended, what happens to affiliated associate brokers and salespeople?

Their licenses remain active
Their licenses are returned and placed on inactive status
Their licenses must be renewed immediately
They can continue to operate independently

The correct answer is: Their licenses are returned and placed on inactive status

When a broker's partnership license is suspended, the licenses of affiliated associate brokers and salespeople are placed on inactive status. This means that they can no longer engage in real estate activities until the broker's license is reinstated or the associates transition to another brokerage where they can operate legally. The principle behind this is that associate brokers and salespeople operate under the authority of their supervising broker’s license. When that supervising license is suspended, any associated licenses become inactive as a matter of regulatory compliance. This ensures that all real estate activities are conducted under a valid and active broker’s supervision, maintaining the integrity of the real estate profession and protecting consumers from unregulated practices. Remaining active or being able to operate independently could lead to unauthorized practice of real estate, which is prohibited. Therefore, the suspension of the broker's license has a direct and necessary impact on the licenses of all associated individuals, causing them to shift to inactive status.